Why AbbVie Stock Flew Higher on Friday

Key Points

• A trio of analysts raised their price targets on the pharmaceutical sector mainstay.

• This came a day after it published second-quarter results.

• 10 stocks we like better than AbbVie ›

A bellwether stock in the lately rather up-and-down pharmaceutical sector, AbbVie (NYSE: ABBV) finished the trading week in style. The company's shares closed more than 3% higher in price thanks in no small part to a clutch of post-earnings analyst price-target increases. With that performance, Abbvie crushed the S&P 500 index, which dived by 1.6% on the day.

A bullish stampede

As typically happens when a publicly traded company posts better-than-expected quarterly results, those pundits made the positive changes a day after AbbVie published its estimates-besting second-quarter figures.

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None of the price-target hikes were particularly dramatic, but since they came from analysts already bullish on AbbVie, they boosted sentiment on the stock. Morgan Stanley's Terrance Flynn now feels the shares are worth $255 apiece, up from his previous level of $250.

His peers Gary Nachman at Raymond James and Guggenheim's Vamil Divan also upped their fair value assessments. In the former's case, he added $9 per share for a new price target of $236, while the latter increased his to $227 from $216. All three analysts maintained their equivalent of a buy recommendation on the stock.

Blockbuster success

Divan's note detailing his price-target change indicated the general tone of those modifications. According to reports, the pundit expressed admiration for the company's performance, singling out the growth in sales of certain blockbuster drugs, notably Skyrizi. Divan pointed out that much of this improvement was due to volume growth, meaning demand remains strong for such products.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie. The Motley Fool has a disclosure policy.